International Trade in Brunei Darussalam

News Related to International Trade in Brunei Darussalam

Business outline for Brunei Darussalam

Economic Overview

Brunei showed moderate growth during the mid 2000s, due to high oil and gas prices. Recently, growth has plummeted suddenly to the point of being negative in 2008-2009. With a GDP growth of around 0.5% in 2010, the country shows the lowest growth rate in the ASEAN and the 2011 outlook is hardly more optimistic.

The production of crude oil and natural gas are the most important sectors of the country's economy. They contribute to more than 50% of the GDP and to 90% of the exports. The country, which shows limited production of non-petroleum products, is very depend on imports. The economy diversification policy that it followed has produced very limited results. The government has been seeking, from 2002, to make Brunei an international financial offshore center as well as the Islamic banking center. Ecotourism and information technologies are also promoted. In order to stimulate growth, the government has increased spending on development and social programs support. The bank sector monitoring, reform of the financial system and support for small and medium-sized companies are also among the governement's priorities.

GDP per inhabitant of the Brunei Sultanate is amongst the highest in Asia, and the living conditions there are very good. The government ensures the provision of all medical services, free education up to University level and subsidizes housing and rice. Life expectancy is of more than 75 years and the literacy level is 95%.

FDI in Figures

Foreign investment in the country has declined during last few days, a trend expected to continue. Apart from a few sectors where local involvement is required, investments in all sectors are open. There are tax incentives and customs duty waivers in certain sectors, namely non-petroleum sectors. However, the lack of transparency in the permits obtention procedures and accounts rendering, are major hindrances.

Oil and natural gas are the two main sector where investments are made. United Kingdom and Netherlands are the main investor countries.

Foreign Trade Overview

The country is open to the market economy. In effect, the government is seeking to diversify its economy towards the manufacturing sector and services. However, the country does not have a government regulation monitoring agency, a fact which hinders the formulation of trade policies. 

Except for tobacco, alcohol and petroleum products, customs duties are not very high on most products. The country, which wishes to liberalize trade further, has announced that all tariff barriers with the ASEAN (Association of Southeast Asian Nations) will be removed by 2015.

Brunei shows a surplus trade balance, a trend which is expected to continue during the coming years.

The Sultanate's main trade partners are the ASEAN member countries, Japan and the United States. The country exports oil, natural gas and clothes to Japan, Indonesia, South Korea and Australia. The main import products are machinery, transport equipment, manufactured products, foodstuffs and medications from Singapore, Malaysia, Japan, China, Thailand, the United States and the United Kingdom.